Turning Microsoft into Apple... on the way out

Turning Microsoft into Apple... on the way out

Earlier today Steve Ballmer announced he would be retiring as CEO of Microsoft in 12 months. The timing is perhaps among the most interesting aspects of the decision. It happened on the eve of yet another massive, company-wide re-organization, and arguably the biggest ever - Ballmer transforming Microsoft into a functional alignment. In other words, reforging it in Apple's organizational image. Guy English on Kicking Bear:

They've just completely recreated the company in a pattern that's totally alien to most organizations of their size. Indeed, the current configuration only seems to work for Apple. Which, arguably, grew into it completely organically. The structure of Apple certainly wasn't created by fiat a month prior to a CEO hitting the bricks.

English argues that, absent an announcement of a new CEO that was in on, and fully onboard with, the re-org, Balmer leaving now is troubling at best. And yet no such CEO was announced, and no internal candidates seem obvious. John Gruber of Daring Fireball:

Here's the hitch though: Ballmer has chased all potential successors out of the company — Ray Ozzie, Robbie Bach, J Allard, and most recently, Steven Sinofsky.

The challenge facing an outside successor are no less daunting. Benedict Evens:

In some ways [Ballmer] did a superb job in the last 30-odd years. But he leaves with Microsoft irrelevant in the new paradigm of the tech industry, mobile.

On the surface (no pun intended), it looks like a bigger job than Marissa Mayer took on at Yahoo! A bigger ship to turn around. And again, I'm wondering who can do it?

Have something to say about this story? Share your comments below! Need help with something else? Submit your question!

Rene Ritchie

Editor-in-Chief of iMore, co-host of Iterate, Debug, Review, Vector, and MacBreak Weekly podcasts. Cook, grappler, photon wrangler. Follow him on Twitter and Google+.

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Turning Microsoft into Apple... on the way out

47 Comments

That was my first thought as well. But given how many years he worked with and how loyal he was to Steve Jobs, I wonder if he would actually take the job. I've watched him in the few keynotes that he gave. He gave a couple good jobs at MS or should I say Windows OS. I still think he would be well-suited as CEO of Apple.

Having worked at NeXT, on OSX & iOS, Forstall has a deep history with Unix-based operating systems. Does he even believe in Windows or Windows Phone, as a product, to want to do great things with it? Most Unix guys, that I know of anyway, hate Windows.

What experience does Forstall have running a company with the size and complexity of Microsoft? And if Steve Jobs didn't think Forstall was CEO material for Apple why would Microsoft think he was CEO material for their company? I don't doubt that Forstall is a brilliant engineer, But what qualifications does he have to be CEO of a 100K employee company like Microsoft?

Forgive me for being ignorant here, but what is the relevance to iMore about this? I don't think the fact that MS is becoming more like Apple is worthy of a news story here. Definitely worth a slot on WPCentral (I read about Ballmer leaving on WPC actually lol, since I frequent there), but iMore? Could you please explain your justification because I am genuinely confused as to the justification of this. And I don't mean that in a nasty way.

It's a pretty big development in the industry. When Apple's biggest non-mobile competitor is about to go through a transition like that, it should be at least mentioned.

"On the surface (no pun intended), it looks like a bigger job than Marissa Mayer took on at Yahoo!"

Microsoft is still in a pretty darn good position even though everyone wants to believe they are doing terrible. Yahoo was a sinking ship. VERY different situations. I defended Rene on some of his other stories in the past but come on now...

Suggestion Rene - Explain who those people are that you are quoting. Most people, including myself, don't know the people or the websites they are from. It would add more understanding to the article.

Yeah, they're in a pretty darn good position to keep milking corporate IT customers.
But they're dead as fried chicken in the mobile space.
You know, the fastest growing computing market. The future of computing.

Oh, and the MSFT share price has dropped 40% since Ballmer took over as CEO.
Yesterday, MSFT jumped 8% on the news that Ballmer will be leaving.
Do the math.

Is this taking into consideration stock splits, or are you just looking at a stock price from back then and now?

It's hardly necessary to take into consideration stock splits, since there haven't been any in Balmer's sorry 13 years.

In fairness to him, he did take over as CEO at the stock's peak, just before the dotcom collapse of 2000. The stock lost about half its value fairly quickly. But, even taking dividends into account, the stock is still behind where it was when he took over January of 2000.

OK, on a serious note - I think it will be very difficult to turn Microsoft around, because Microsoft has never been a nimble company. They were late to the party on the internet, mobile, social, etc. Their current position has really depended on the (lucky) near monopolies they gained early on in desktop OSs and office suites - not on innovation, quality, or because they're a really nice company. In essence, they bullied/stole/copied their way to the top. There are now equal or far superior competitive products in the market (Linux, Oracle, OS X, MySQL, Chrome, etc.) that are gradually eating into the market niches Microsoft used to have such a grip on. And new markets emerge that Microsoft seems to miss altogether. They're in a position now where others lead and they try to play catch-up. Its really not a business model that will sustain you for the long haul.

Hate Microsoft much? To say they became big based on stealing and copying (and no innovation) is pretty crazy.

Well that's not the only thing they did, but it gave them a leg up. This is an excellent article that may enlighten:

http://appleinsider.com/articles/13/08/10/xerox-parc-the-apple-inc-macin...

And I don't hate MS (I'm writing this note on a Windows machine that I use every day). In fact, I was a Beta tester for Windows 3.11, Windows NT, ran a Windows User Group, etc. etc. But I also watched them abuse their position with vendors, use utterly ruthless tactics with smaller companies and rivals (ask Citrix about their experience), employ monopolistic practices, and consistently release some of the buggiest software on the planet (I never touch a new version of Windows until Service Pak 2 is out). And no, their success has not depended on their own innovation. They have certainly made innovations, but their success has been primarily due to the ruthless exploitation of their near monopolies.

Their current position saddens me, really. But I'm about to make the switch to a Mac, and I doubt I will go back to Microsoft again.

This isn't the place to have a long discussion (doesn't really have much to do with the article), but I disagree entirely. If you want to look at a company that is in a great position because of bully tactics, look at Ticketmaster.

Read the article I linked to (there's an equally good Part 2). You might also find the book "Accidental Empires" an interesting read.

I wouldn't get into an innovation war of Apple vs. MS. Both are quite innovative, but I think you have to say the latter has "invented" a whole lot more than the former. Apple mostly has better advertisements.

Also, with respect to the tone of the article, what is meant by "turn MS around"? It is not like they are a burning platform or anything. They are a massive, incredibly profitable, spectacularly diversified, extremely well positioned company to see continued growth. Is Office under attack anywhere (don't even mention Google Docs)? Is there any product that can do what Azure can? Is Windows Server looking threatened?

MS has fallen short based upon what was clearly possible -- Apple and Google are great examples of markets MS *could* have owned. But they are also doing very well -- and increasingly well -- in their current markets. Even the Windows division is holding firm. Apple is a much bigger risk than MS.

Well Linux/Unix has twice the market share of Windows Server. And I think Office may have some competition soon, because I think iWorks in the Cloud is going to wind up being free, or darn close to it, and from what I can see its pretty robust for the majority of applications. I'm running it on my Windows PC as we speak.

I don't think Microsoft is going away, but I think they will fade from the stage somewhat as they lose mind share to newer companies. Eventually I think they could be de-throned in the OS market space. Currently Windows applications run better on OS X than they do on Windows itself. What if that emulation were free? At what point does the OS become irrelevant? We'll have to wait and see.

"Currently Windows applications run better on OS X than they do on Windows itself. What if that emulation were free? "

What in the world are you talking about?

^^ And there was an article that benchmarked Windows apps running on a Mac, and they beat the scores of the same apps running on a PC. Sorry, don't have a link to that but it came out a few months ago.

Those scores reflected running an application under bootcamp, where the Mac boots directly into Windows and never touches OSX. The Mac, at that point, is just another WinTel PC; it performs great because most Macs are lovely pieces of hardware, but OSX has nothing to do with it.

As for your other comment on parallels - no. Running Windows under emulation as not close to running Windows natively, and neither Parallels nor VMware (creators of Fusion) claim that it is.

Windows programs (while technically apps, apps are more universally known as a name for mobile applications) are not going to run better in a virtual machine compared to a native PC environment. I have used that on a Macbook Air before btw.

Well, the article I read said otherwise.

I'll be getting a Mac regardless, and what few Windows apps I need to take with me will be running in Parallels. My boss switched to Mac a few years ago, and says he doesn't regret it at all - would never go back. So I'm kind of excited to take the plunge! Just waiting for the new ones to come out with Haswell processors.

You read wrong. Emulation is inherently slower, period.

That said, I loved my Macbook Air and would still have it if my needs/wants didn't change. It just seems like you are trying to convince yourself of the change by dogging MS as much as possible.

I read what I read. Who are you to tell me what I did or did not read?

I'm switching because I think Apple has a superior platform/ecosystem. Period.

And it just seems like you're a Microsoft fan trolling on a Apple forum.

Which is funny considering I literally just said I owned a Macbook Air and loved it. I currently own two Apple TVs. I have multiple Android tablets. I have a Z10. I have a Lumia 920. etc.

Point being, I never hated on anything Apple in my comments. I was simply pointing out things that I felt were wrong.

"A Microsoft fan trolling on an Apple forum." I can assure you as a retired moderator for WPCentral (which has near enough identical rules to iMore), that he is not a troll. In fact at WPC he is one of our star contributors. Why would he risk getting into trouble at WPC for his antics here (and yes, it has happened before that someone trolling here got punished at WPC).

Entirely different then what you said. Also, I'm not really sure what they are measuring considering they say an i3-based Acer laptop is number 2. While Windows running on a Macbook Air/Pro in boot camp runs great (I did this on mine), I would take this article with a grain of salt.

Yes, I understand the difference between dual-boot and emulation. It really doesn't matter. I'm buying a Mac. I'm ditching Windows. I have two options to run whatever legacy Windows programs I might want. Microsoft and I are parting company, and I don't anticipate a need for them in the future. They could always surprise me, however, so I'll never say never...

There is a big difference between Microsoft and Yahoo!, Microsoft is profitable. Very profitable. What Microsoft lacks is relevance in the marketplace, that's what the new CEO has to turn around, which, IMHO, isn't as big a job as making a company profitable again.

The worst thing that could happen is the CEO fails to make them relevant, and Microsoft ends up like IBM. They will still make a ton of money, just not in the consumer space.

Where "very profitable" means "profitable when milking corporate IT by selling them Windows and Office licenses, and ignoring massive losses in Surface, Bing, and other costly me-to efforts."

And where "relevance in the marketplace" means "any hope of taking a profitable slice of the mobile pie."

Profits are profits no matter how they get them. Why do we want companies to be darling activists? That's not what companies do, they make money. That's it. And almost every company has divisions where they lose money. The point of everything is to make money over all.

And that is what they are working towards, relevance in the consumer marketplace. It just happens that that marketplace is mobile.

A company makes a lot of money off of its core products?!?!? Who would have thought that?!?!?

Anyways Microsoft has A LOT more products for the corporate environment then just Office and Windows.

You act like MS has tricked all the major company into using their products for decades to earn huge profits considering all the terrible products MS has.

Your comments can be taken more seriously if you try to show a level of unbias and just show facts.

Re: "The structure of Apple certainly wasn’t created by fiat a month prior to a CEO hitting the bricks."

Neither was Microsoft's.

There is only 1 man in entire universe who could take control of that big ship: Bill Gates.

And, he is Google's worst nightmare.

PC World, of all web sites, has a great collection of Steve Ballmer's wackiest, sweatiest, chimp-screamiest video hits:

http://www.pcworld.com/article/2047344/steve-ballmers-wackiest-craziest-...

Now that we can look back on Ballmer's tenure as CEO, we can see that he always talked like a sales guy. He talked to interviewers like he was trying to get them to buy Microsoft products and not Apple's. He talked to auditoriums full of developers like he was trying to motivate sales droids to beat next quarter's sales quotas. He talked to everyone like a sales guy would.

Fine. But what really hurt Microsoft is that he also *thought* like a sales guy.
And sales guys only care about two things:

1. Closing sales right now.
2. Next quarter's sales quota.

And that's just not a big enough picture. It takes long-term vision to build a strategy to guide a big company like Microsoft to success outside its core competency. Not quarter-by-quarter tactics.

Just thinking out loud:
There's no way would Ballmer have announced the re-org if he was planning to retire.
There's no way his unplanned retirement happened overnight, the pressures were obvious to him.
He announced the re-org to get a confidence vote from the market to deflect the Board. With no stock pop, he lost.
My guess this means the re-org is (effectively, if not officially) on hold.
They bring in a new CEO by January. Microsoft will never be the same. They will make p-rofits*, but they'll never again be the 600-lb gorilla dominating the marketplace. It's hard to see how they escape the declining market for their cash cow products. Blackberry writ large. The answer to the plea "what did we do wrong?" is "nothing" (in all its meanings).

* - evidently a comment can't refer to m-o-n-e-y without being flagged as spam

I have no idea why iMore would cover this. So Ballmer is going to retire in 12 months, why is there an article on the way Microsoft is setting up a to copy Apple and how it will fail. On some days no story is the better idea.

Two reasons why iMore would cover this:
1. It's the day's biggest tech news.
2. We're all getting sick and tired of "leaked" iPhone 5S / 5C component photos.